Related Cos’ chief Stephen Ross must be breathing a sigh of relief. The New York City-based developer is famous for building the Time Warner Center on Columbus Circle. He just scored two major sales in two risky projects in Los Angeles.
First, Los Angeles’ Downtown News announced that Istithmar, one of the investment arms of Dubai’s royal family was joining in a high-profile development in downtown LA called the Grand. The $3 billion project, consisting of a hotel, condos and retail stores designed by LA’s own Frank Gehry, had fallen behind schedule after the big California Public Employees’ Retirement System pension fund pulled out. Lenders are requiring larger downpayments these days. Istithmar is going to help with the $300 million equity needed for the first phase of the project.
In related news, so to speak, the company announced it had sold one of the penthouses in a new building under construction in LA’s Century City neighborhood. The project is notable because it sits on the site of a St. Regis hotel which Related originally bought with plans to convert it into condos. The firm ultimately decided to tear the building down and build a new structure designed by starchitect Robert A.M. Stern. Related says one penthouse just sold for $15 million—a record $2,700 a square foot—to an unamed local buyer.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.